An Investor told me I don't need the cheapest money, I need predictable money

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An Investor told me I don't need the cheapest money, I need predictable money

Frankie VozziBusiness Member
Member since 2025 · 358 posts · 89 votes

That line stuck with me.

He wasn't saying rate didn't matter. It absolutely did.

His point was that when he's under contract on a good deal, knowing the financing will actually perform is sometimes worth more than saving a little on the rate.

He'd rather know the terms upfront, know what's expected from him, and know the closing timeline than spend two weeks chasing a slightly better quote and risk the deal.

I thought it was an interesting perspective, especially from someone doing multiple projects.

For investors who use hard money regularly, what matters most when you choose a lender: rate, leverage, speed, or certainty of execution?

And has your answer changed as you've done more deals?

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1w

last year at BP Con Vegas I talked to a few folks and they wanted to treat private money like you see the adds for on line brokerages that advertise they broker form 30 lenders and lenders COMPETE for your loans.. Our bizz just does not work that way.. And the second someone starts in on that train of thought is when I tune out. NEXT.. :)

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  • Vaibhav PuranikPro Member
    Member since 2025 · 86 posts · 48 votes
    1w

    I agree with the investor. It doesn't need to be the cheapest rate, but it needs to be the lender who will perform and with the speed we want.

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    • Frankie VozziBusiness Member
      OP
      Member since 2025 · 358 posts · 89 votes
      1w

      Exactly. Once you're doing enough volume, certainty of execution starts to matter a lot more.

      A slightly better rate doesn't help much if the lender can't perform when the deal needs to close.

      With 82 doors, I'm curious do you usually stick with one or two lenders you trust, or do you keep several in rotation depending on the deal?

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1w

    its the whole reason I am still in business.. on time everytime as I loan my own funds .. so there is not underwriter etc.. just me. and for repeat clients its pretty simple they get the smokin deals when the deals have to close in 3 to 5 days and those are my specialty.

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    • Frankie VozziBusiness Member
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      Member since 2025 · 358 posts · 89 votes
      5h

      Jay, that's a huge advantage, especially when an investor finds a deal that needs to close in just a few days. Having direct control over the capital definitely changes the conversation. Curious, do you mainly focus on Nevada deals, or are you funding projects in other markets too?

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1w

    This is why real estate is a relationship-based business. If you have the right team members who surround you, especially lenders, and you treat them well, they will treat you well. When deals come around that might be a little nuanced or have an expedited timeline, that person most likely will have your back.

    When I was at BPCon this past weekend, I was telling somebody that this type of relationship, even if you're paying 1% more per loan, is non-consequential because, on a $250,000 loan, $2,500 for a full year makes that much of a difference. It should not take you a year to flip a property. If that makes that much of a difference, then you should not be doing the deal in the first place.

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1w

      last year at BP Con Vegas I talked to a few folks and they wanted to treat private money like you see the adds for on line brokerages that advertise they broker form 30 lenders and lenders COMPETE for your loans.. Our bizz just does not work that way.. And the second someone starts in on that train of thought is when I tune out. NEXT.. :)

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      JLH Capital Partners51 Review
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    • Frankie VozziBusiness Member
      OP
      Member since 2025 · 358 posts · 89 votes
      5h

      Chris, I agree. That relationship becomes especially valuable when something unexpected happens during a deal. A slightly lower rate doesn't mean much if you lose the property because the financing falls apart. I think the challenge for newer investors is figuring out which lenders can actually deliver before they've worked with them. What would you recommend they look for when building those relationships?

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    1w

    I can’t tell you how many loans we’ve done as a result of panicked phone calls from borrowers whose lender flaked out and who need funding within a few days. Though it’s never been a planned strategy, somehow it’s become a specialty for us. Our record is funding the very next day.

    This happens because we’ve gotten to know our borrowers personally, in advance, and we work hard to build those relationships. They trust that we will always do what we say. Always.

    No one questions your terms when they’re in a bind like that and, of course, we don’t take advantage of the situation. Our rates are the same whether we fund tomorrow or next week.

    If you need us, we’ll walk on coals to get you funded. But if you’re calling us because you think you can squeeze another quarter point out of us, you’re absolutely calling the wrong lender.

    So, like @Jay Hinrichs, the fastest way to get me to blow you off is to try to negotiate our already-fair and 100% reliable terms.

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    • Frankie VozziBusiness Member
      OP
      Member since 2025 · 358 posts · 89 votes
      5h

      Jeff, funding the next day is impressive. And I think you hit on something important: those emergency calls usually come down to relationships that were built well before the borrower needed help. Curious, when a borrower comes to you after another lender falls through, what's usually the biggest reason the original financing failed?

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  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 195 posts · 91 votes
    6h

    Asking this before a lender lets you down is worth a lot. Certainty is the hardest of the four to judge up front, because a quote looks the same whether the lender performs or not. What tends to show it is how they act after closing. Ask how quickly draws come back after an inspection, whether they lend their own capital or need to sell the loan to a buyer whose guidelines can shift before you close, and what an extension costs if the rehab runs long. A draw that sits for two weeks can stall a contractor, and that can cost more than a point of rate. Those answers won't tell you everything about a lender, but they sort them quickly. The rate is what they charge, the draws are how they treat you mid-project.

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    • Frankie VozziBusiness Member
      OP
      Member since 2025 · 358 posts · 89 votes
      5h

      Noah, that's a really good distinction between what happens at closing and what happens during the project. A lender can offer competitive terms upfront, but if draws are delayed, the investor ends up paying for it in other ways. I especially like your point about asking about extensions before they're needed. Do you think investors are getting better at asking those questions upfront, or are most still focused primarily on rates and leverage?

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